Chris Mattheisen is the CEO of Magyar Telekom, the largest telecommunications company in Hungary. He spoke with The Prospect Group about the telecom sector in Hungary, e-commerce opportunities, and preparing for unforeseen opportunities in the future.

Chris Mattheisen

How much does the telecommunications sector contribute to the GDP of Hungary?

CHRIS MATTHEISEN: By some estimates, telecommunications makes about 12% of Hungarian GDP. By some other estimates, it makes up about a 4th of all the economic growth in the country. There's a reason for that because, as yet, the spillover effects of building out this super high-quality infrastructure that has not spilled over into increasing online commerce or those things. But that opportunity is ahead of us. A lot of the economic growth that you see in the economy comes from those areas, so we shouldn’t be surprised that telecommunications at this stage in the economy makes up such a high rate of the GDP and of the economic growth of the country.

Overall, how would you describe the quality of the infrastructure in Hungary compared to other Central and Eastern European neighbors?

CHRIS MATTHEISEN: The quality of infrastructure, both fixed and mobile, I think it compares very favorably to countries in the region, in fact, countries across Western Europe. By the end of this year we'll have 97% LTE coverage. That makes us pretty fast. That puts us in the lead and if somebody travels here and uses their mobile device here, I think they will discover that, both in terms of coverage and quality and throughput, you'll find that the average level, regardless of the network, is going to be pretty high. So I do think that's one factor that definitely already helps Hungary's competitiveness compared with other markets.

What impact does ICT infrastructure have on Hungary’s ability to attract businesses to set up shop in the country?

CHRIS MATTHEISEN: I do think it starts with the access, it start with the infrastructure. Having said that, I think there are lots of opportunities here because while we are in a frenzied way building out all this access, the real building out of that access has only happened in the last three, maybe four years. Before that I would say that Hungary was a little bit behind the curve compared to other markets. As a result, you have the penetration of let's say online or e-commerce is actually still relatively low in Hungary. I think that's a tremendous upside. I think that's a tremendous opportunity for the country in general because now that you've got the really super high quality networks, now you can start building on it. You can start putting online commerce and online solutions on top of that access. So I think there are a lot of opportunities here.

What opportunities do you see for e-commerce in Hungary?

CHRIS MATTHEISEN: I think the biggest opportunity there is the fact that we are no longer in a PC centric world. So e-commerce/online commerce has grown up in markets like the US from a PC base. Here, the PC base is on average lower, but the smart phone, the app enabled smart phone, is leap frogging that sort of environment and I think the kinds of advances you are going to make in online penetration, online commerce, is going to be through mobile apps. And if you look at it in those terms, I think Hungary is not very far behind anybody else. I think it's rapidly catching up with the rest of the world, with developed countries in that aspect. And I think that will present opportunities. So online commerce/ecommerce, all these things will grow. I think they'll grow dramatically. They will not necessarily grow dramatically through the traditional PC environment. They'll grow through the mobile app environment.

What is one big trend or paradigm shift that you see coming in the future?

CHRIS MATTHEISEN: I think one big trend that you are going to see much more of is, today, you use mobile internet, you use mobile broadband for internet, and primarily you still are browsing in one form or another. It's a human being looking at a screen, it could be in an app, it could be in a browser. And he's either retrieving information or sending it or some combination of those things. That’s an easy model to understand.

The connected car is one thing you can kind of see coming right now, but there are going to be a lot more things that are going to be difficult to see, but things that will require the high reliability bandwidth with the low latency.

I think interestingly, some of the things we see are developments such as the connected car or tele-medicine. And these kinds of applications, they are coming. A lot of money is behind developing these things, and these are applications that will require not just high bandwidth, but very low latency bandwidth. And so you'll need high bandwidth that reacts anywhere and everywhere in milliseconds.

I think the networks that we have to be building today and in the future are increasingly going to have to be networks that accommodate that because I think that's where a lot of opportunities are going to come to the industry from left-field, in ways that people cannot foresee it today. The connected car is one thing you can kind of see coming right now, but there are going to be a lot more things that are going to be difficult to see, but things that will require the high reliability bandwidth with the low latency.